The purchase marks the largest sum paid for a social media company in years — even bigger than Facebook acquiring Instagram in 2012 for $1 billion.

It's also a bold move for new Yahoo! CEO Marissa Mayer and the largest deal she's made since taking over the company last summer. Yahoo!'s previous ventures into social networking and other online media sites, such as Flickr and GeoCities, have been unsuccessful.

"Tumblr is redefining creative expression online," Mayer said in a press release. "On many levels, Tumblr and Yahoo! couldn't be more different, but, at the same time, they couldn't be more complementary. Yahoo is the Internet's original media network. Tumblr is the Internet's fastest-growing media frenzy."

The companies plan to integrate Yahoo!'s personalization technology and search features and Tumblr's blog posts, which occur at a rate of 900 posts per second, according to Yahoo!.